We have continued our studies of chromatin structure in the neighborhood of expressed genes. The globin gene family in chicken erythroid cells serves as a model system in which it is possible to study the mechanisms associated with regulation of the cluster and individual members of the family during erythroid development. We have focused attention on the 1.2 kb insulator DNA sequence at the 5' end of the chicken beta-globin locus. This insulator is capable both of blocking the influence of outside enhancers and of preventing the encroachment of condensed chromatin that might shut down expression of the entire region. We had earlier narrowed down enhancer blocking activity to a small DNA fragment within the 1.2 kb sequence, and shown that this activity involves binding of the ubiquitous vertebrate nuclear protein CTCF. We showed that the CTCF binding site also plays an important role in imprinting at the Igf2/H19 locus in mouse and humans. The insulator also has the ability to protect against position effects reporter genes that are stably transfected into cell lines or animals. We showed that this protective ability is present in a ?core' element, 250 bp long, from within the 1.2 kb insulator, and that deletion of subregions within the core that contain the CTCF site do not affect activity. However four other subregions corresponding to binding sites for nuclear proteins are important for position effect protection. We have identified at least one of the involved factors, binding to two of these sites, as a protein previously described in our laboratory, and which has a strong preference for oligo G sequences. The globin insulator appears to serve as a barrier against encroachment of an upstream region of condensed chromatin about 16 kb in length. We have developed methods for analyzing the hydrodynamic properties of this segment with high precision, and are now using these methods to determine the state of compaction of this important element. Assays for protection against position effects make use of a reporter gene for a protein that is displayed on the cell surface, making possible determination of individual cell activities as well as total mRNA abundance. In uninsulated lines expression of this gene is typically extinguished over 10-80 days in culture. Because such extinction is usually marked by increased DNA methylation we made use of bisulfite mapping to determine the methylation state of each CpG methylation site in the promoter and part of the coding region. The time course of DNA methylation is slow compared to the rate of disappearance of mRNA. However the loss of messenger RNA (mRNA) correlates with the loss of histone acetylation. As extinction proceeds, levels of H3 lysine 9 methylation, which we have shown is a mark of inactive globin chromatin, also increase slowly. The data support a model in which histone deacetylation is the controlling step in inactivation of this reporter. We find that insulated reporters, which are protected from silencing, behave quite differently. Here acetylation is maintained over both promoter and coding region (even in a gene with a mutated enhancer), but DNA methylation is only inhibited over the promoter. This appears to be sufficient to protect against extinction. We propose a model in which once again histone acetylation is the primary step in maintaining activity. This in turn makes nucleosomes over the promoter more mobile, and allows binding of transcription factors. Occupancy of potential DNA methylation sites by these bound proteins in turn protects against inactivation. This is completely different from the earlier known regulatory loop in which DNA methylation is the primary event leading to recruitment of histone deacetylases. It serves to confirm the mechanism we have previously proposed for insulator protection against position effects.